Asian Stock Markets Experience Sharp Decline Following US Inflation Data

The faster-than-expected rise in consumer inflation in the US reinforced expectations that the Fed could raise interest rates, triggering sharp selling in Asian markets on Thursday. Declines in regional indices suppressed risk appetite, while the retreat in technology stocks deepened the negative sentiment in the markets.

Losses in Asian Markets

The MSCI Asia-Pacific Index, excluding Japan, recorded a decline of 1.2 percent. South Korea's Kospi index lost 5.6 percent in value, while Japan's Nikkei 225 index dropped by 1.3 percent.

Assessments by Market Experts

Pepperstone Head of Research Chris Weston stated that a challenging session awaited Asian markets, noting that Kospi and Nikkei futures pointed to a renewed weakening in technology stocks. Weston expressed that leveraged exchange-traded fund transactions and financing risks for artificial intelligence infrastructure remained in focus for investors.

Negative Course on Wall Street

Following US September inflation accelerating above expectations, stocks on Wall Street declined for the third consecutive trading session. While the S&P 500 fell 1.1 percent and the Nasdaq Composite Index dropped 1.9 percent, the index tracking semiconductor stocks extended its losses to the sixth day.

Artificial Intelligence and Financing Risks

Rising interest rate expectations weighed on the shares of artificial intelligence companies sensitive to borrowing costs, such as Oracle and CoreWeave. JPMorgan analysts stated that the initial selling wave was triggered by the strong inflation data, but the technology sector was decisive in the intraday decline.

Fed Pricing and Bond Yields

According to CME FedWatch data, markets are pricing in a 31.6 percent probability of a 25 basis point rate hike by the Fed at its meeting concluding on October 28. This rate was at 22.1 percent the previous day, and the yield on the US 10-year Treasury note fell by 4.4 basis points to 5.144 percent.